IRVINE, Calif. – March 11, 2010 – RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its February 2010 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 308,524 U.S. properties during the month, a decrease of 2 percent from the previous month but still 6 percent above the level reported in February 2009. The report also shows one in every 418 U.S. housing units received a foreclosure filing in February.

“The 6 percent year-over-year increase we saw in February was the smallest annual increase we’ve seen since January 2006, when we began calculating year-over-year increases, but it still marked the 50th consecutive month of year-over-year increases in foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity — albeit at a historically high level that will likely continue for an extended period.

“In addition, severe winter weather appears to have temporarily slowed the processing of foreclosure records in some Northeastern and Mid-Atlantic states.”

Foreclosure activity by type

Default notices (Notices of Default and Lis Pendens) were reported on a total of 106,208 U.S. properties during the month, an increase of 3 percent from the previous month but down 3 percent from February 2009. Default notices were down 25 percent from their peak of more than 142,000 in April 2009 but were still more than three times the number they were four years ago in February 2006.

Foreclosure auctions (Notices of Trustee’s Sale and Notices of Sheriff’s Sales) were scheduled for the first time on a total of 123,633 U.S. properties, a decrease of 1 percent from the previous month but still 16 percent higher than the level reported in February 2009. Scheduled auctions were down 14 percent from their peak of more than 144,000 in August 2009 but were also about three times higher than the number reported in February 2006.

Bank repossessions (REOs) were reported on a total of 78,683 U.S. properties during the month, a 10 percent decrease from the previous month but an increase of 6 percent from February 2009. Bank repossessions were down nearly 15 percent from their peak of more than 92,000 in December 2009 but were at nearly twice the level reported in February 2006.

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The media said 2009 ended like a lamb.  The data was contradictory to that opinion.  December was a good month.  The media is also saying 2010 started like a lamb.    On this one, they are relatively correct.  Sales indeed showed a sharp decline in January (Sacramento single family homes; see Indicator #1 below).  As of right now, they are even lower in February.  Since March 2008, the number of closed sales has been consistenly over 1400 per month. 

The supply is limited to contingent short sales and REO fixers.  This is how booms start though.  Everything is quiet in the eye of the storm.  Spring has sprung and buyers are awakening.  If you are thinking of selling, get it on the market soon.  Call me for help.  If you are buying, yes, I can help you too. 

The charts below reflect over 10 years of local data collection, charting and trending.  The commentary is relevant to this information and what the author sees in the trenches.  No single piece of data can tell the whole story nor do these specific indicators predict the future. Remember, the “momentum” of a trend is important in understanding the force and direction of an underlying data element. A commodity trader watches momentum indicators to more accurately (but still with no guarantees) foretell a future data point. These are million-dollar decisions so momentum is important. 

The charting doesn’t end here.  Over 10 years of median sales price data has been collected and charted for over 40 local zip codes (see my Communities web page coming soon).  As you know, real estate is local and it’s hard to find data more granular than a zip code.  

Major Indicator #1 – Sales

Since April 2008 the momentum of Sales has been positive.  In January it crossed back into negative territory.  This would trigger a “SELL” action when a price is being charted.  In the case of this data element, it depicts the typical valley that “should” occur in a real estate cycle.  You can see the “winter dip” occur between December and February each year.  But things are thawing and bears are hungry.

Opinion:  Look for sales to decrease in February and then increase moderately through the spring and summer.  Nobody is sure what the rules will be and my bet is that Congress (should be written with a small “c” in Crayon font) will extend the tax credit for buyers, in some shape or form.  There are always hungry bears.

Major Indicator #2 – REO Sales

These are also known as “bank-owned” and “foreclosed” properties.  When auction demands are not met when offered on the courthouse steps, these homes revert to the owning/servicing bank to sell on the open market.  These have always occurred but not in the numbers we have seen since 2006. 

Since July 2009, REO sales have been less than half the number of Sales. The winter and spring before that, REOs were over 70% of the sales volume.  Banks are simply not foreclosing.  Whether due to accounting practices or “deer in the headlights” syndrome, the movement of product through the pipeline has stalled.  Now the supply is low except for contingent short sales.  And those can be a waste of time.  The momentum is negative.  We hope the REO Sales momentum increases — it would signify the availability of supply. 

Opinion:  Look for REO sales to stay low until the banks understand the new rules.  And then can understand the coming changes to those new rules.  

Major Indicator #3a – Median Sales Price (Sac Cnty)

The median price for all of Sacramento County has shown a slight improvement — but now retreating to the Summer 2001 price levels.  Momentum is serious about getting back to positive territory. 

Opinion:  The area price will decrease slightly while some high-priced areas/zipcodes will see a material reduction in comparable sales. 

Major Indicator #3b – Median Sales Price (ED Cnty)

The choppiness of this El Dorado County chart really just signifies the variation of homes, prices, and supply of sales comparables.  Even the momentum cannot decide which direction to go. 

Opinion:  This general price will decrease slightly due to the high-end which will experience most of the impact in 2010.

Major Indicator #3c – Median Sales Price (PL Cnty)

The slide of prices in Placer has been slower and smoother.  There also may be some corrupting forces at the County and City levels which we don’t see.  For some, the local pride is too sensitive and they won’t accept their just deserts.   Much of Whitney Ranch is entering the “short sale” zone.  This will help supply for some.

Opinion:  The price here will also decline to the squeeze at the higher end of home prices.

Major Indicator #3 – Median Sales Price (All)

This chart shows the comparison of the 3 counties.   It doesn’t include the momentum indicators but it’s interesting to see the responsiveness of Sacramento’s price changes compared to the other 2 counties.

Major Indicator #4 – Notices of Default (NODs)

Notices of Default have hit a major stoppage in the pipeline.  The indicator that is missing is “borrowers in distress”.  That would be a difficult piece of information to collect.

Opinion:  The number of NODs will increase as will Auctions and foreclosures.

Major Indicator #5 – New Home Permits

If they are still building, the homes are smaller and more sensibly designed.  Gone (temporarily?) are the massive walk-in closets and master bathrooms.  Gone are the 4-car garages and bonus rooms.  We have entered and exited the “McMansion Era”.  Some builders died before they could exit.

Opinion:  Population increases generally require more housing.  It only seems we have enough. 

Major Indicator #6 – Mortgage Rate

Free money!!!  If you can get a loan, don’t miss this window of opportunity.  But rules have changed so you better know your buying power and options.

Opinion:  Rates will increase slightly over the year although other lending restrictions will corrupt the market making the rate change less important.  This cannot last for much longer.  China will inevitably call us on it.

Major Indicator #7 – Inventory

I’ve added another piece of information to this chart:  “Active Short Contingent” properties are akin to a Pending status with regard to how Realtors treat them.   If it’s “contingent”, Realtors and buyers know the home has a soft deal with a prospective purchaser.  I think MetroList should make it a “Pending Contingent” status.  It will make the numbers stop lying. 

Opinion:  Inventory will increase but so will Active Short Contingent listings.  So who knows!

Major Indicator #8 – Months’ Inventory

The Inventory is over-stated so the true turn-over rate (Months’ Inventory) is a little different than depicted below.  Since this depicts the months required to sell all inventory (at the average Days on Market), this too is over-stated.  Mitigating that variance is the fact that many of these “active” listings are actually “pending contingent” and can remain on the market for many months without a bank approval or change in status.  In other words, this indicator is low but not necessarily 3.3 months.

Opinion:  See opinion on “7 – Inventory” above.

Major Indicator #9 – Short Sales

This is a new indicator showing how many Short Sales were successfully closed.  The momentum cannot be charted until at least 12 months of raw data have been collected. 

Opinion:  This number will stay relatively flat, with a slight increase.  Many banks have already concluded they will not entertain short sale offers.  Some borrowers purchased mortgage insurance with their loans which means the lender doesn’t care if they foreclose (insurance pays them about 80% of loan value). 

Major Indicator #10 – Swing Indicator

This is my favorite indicator since it shows the oscillation of the market — much like a EKG machine.  Let’s hope the market doesn’t flatline.  Except for January ‘09, Up-Ticks outpaced Down-Ticks.  For this last month, 41 zipcodes had a momentum up-tick. 

Opinion:  The up-ticks will retreat to a lower level.  This is a cycle that we cannot and should not fight.

These charts depict the momentum of changes in the underlying raw data to help forecast direction. These are not a guarantee of future direction but aid in the prediction of cause/affect in the various market forces. No single indicator tells the whole story. Also charted is the raw data itself. For an explanation or for a monthly subscription to this periodic report, call or email Jay Emerson (916-517-9606, Jay@JayEmerson.com). The data is deemed reliable but not guaranteed. Sources include DataQuick, CBIA, Sac MetroList, and other public information.

Contact me for more details and to get an edge in real estate!

Jay Emerson, DRE Broker #01788488
Realty Executives Galster Group
5006 Sunrise Blvd, Ste 202
Fair Oaks, CA 95628
(916) 517-9606
Fax (916) 966-8706

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1. No BS Real Estate Indicators 2009 12 The [local real estate] year in review......
2. Sacramento County Housing Statistics for January 2010   January shows decreased activity, median price remains higher than year ago A seasonally normal decrease in home sales...
3. Sacramento 95826 Sales Data – January 2010 (Rosemont, College Greens/Glenbrook) Here is sales data information for that area for closed sales in January 2010: All of the 95826: 19  Sold...

From The National Association of Realtors Pending Home Sales Down; Severe Weather Impacting Market

Pending home sales are down and additional declines are expected from abnormal weather conditions, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in January, fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009 when it was 80.5.

Lawrence Yun, NAR chief economist, said weather is likely to impact housing data. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” he said.

As such, abnormal swings are expected in housing data. “We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June,” Yun said. “The real question is what happens in the second half of the year. If there is sufficient job creation, housing can become self-sustaining with stable to modestly rising home prices because inventory has been trending downward.”

The PHSI in the Northeast fell 8.7 percent to 71.3 in January but is 20.5 percent higher than January 2009. In the Midwest the index dropped 8.9 percent to 81.2 but is 11.8 percent above a year ago. Pending home sales in the South slipped 2.1 percent to an index of 98.1, but the index is 18.0 percent higher than January 2009. In the West the index dropped 13.2 percent to 102.9 but is 1.4 percent above a year ago.

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1. Pending Home Sales Pull Back From The National Association of Realtors Pending Home Sales Down from Surge but Higher than a Year Ago Contract activity...
2. Pending Home Sales Stabilize Pending Home Sales have stabilized in December after November’s big drop-off. The National Association of Realtors reports Pending Home Sales...
3. Existing Home Sales Tumble Existing Home Sales for January were far below expectations, dropping 7.2%. Economists were expecting a small increase. January continued December’s...

Here is the new one:

Here is last year’s chart:

And, here is the original:

There are some thoughts to consider:

1. There are about 2.5 years of huge resets and recasting ahead.  Because the foreclosure pipeline is already so backlogged, people who stop making payments during this stretch could easily end up waiting another 1-2 years before their homes are actually foreclosed upon.  Even without all of the foreclosures still to come from unemployment, it is easy to see this foreclosure crisis being with us well into 2014-2015.
2. Because mortgage interest rates are low, “resets” are less of a problem right now. Today, “recasts” are the real threat.  A recast refers to the changing of payment options for Option-Arm loans.  Many borrowers bought the biggest home they could “afford”, using minimum payments to qualify. When the minimum payment option disappears, their monthly expense will “recast” to a substantially-higher amount, regardless of what interest rates do.
3. Most Option-Arm loans were concentrated in higher-income areas and generally used to buy more expensive homes.  Banks that are holding lots of these on their books, like Wells Fargo, have been fairly proactive in modifying these loans now, while long term rates are low.  It will be interesting to watch, however, if many of these high-end borrowers will walk away from their mortgages as high-end prices continue to fall.
4. Though rates are currently low, you can see how sensitive the market would be to rate hikes.  The Fed’s MBS repurchase program, the Euro, Greece, Spain, China’s Treasury holdings…all of these factors will likely weigh on mortgage rates in the coming years and have profound effects on our overall economy.
5. Note the volume of Agency, Alt-A, and Prime loans that will be resetting over the next few years.  These were generally to more qualified buyers with good credit.  If this crowd begins to feel that walking away from their mortgages is socially acceptable, then the housing market will suffer substantially.

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1. Adjustable Rate Mortgage Resets Foretell Major Problems in California’s Housing Market This article originally appear on the Irvine Housing Blog The ARM Problem has not gone away. Today we examine an updated ARM reset...
2. Why Did FHA Change? FHA announces policy changes to reduce risk – Bye Bye 6% Seller’s credit and we now have a minimum credit...
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January continued December’s drop from a blow-out November, when the tax credits were originally supposed to end. Check out the effects of the tax credit in this chart from Calculated Risk:

From The National Association of Realtors: Existing-Home Sales Down in January but Higher than a Year Ago; Prices Steady

Existing-home sales fell in January but are above year-ago levels, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate¹ of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.

Lawrence Yun, NAR chief economist, said there is still some delay between shopping and closing that affected current sales. “Most of the completed deals in January were based on contracts in November and December. People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales,” he said. “Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery.”

Total housing inventory at the end of January fell 0.5 percent to 3.27 million existing homes available for sale, which represents a 7.8-month supply² at the current sales pace, up from a 7.2-month supply in December. Raw unsold inventory is 9.6 percent below a year ago, and is at the lowest level since March 2006.

“Activity should be picking up strongly in late spring as buyers take advantage of the tax credit, which is critical to absorb distressed properties reaching the market and to continually chip away at inventory,” Yun said. “With a downtrend in the number of homes on the market, especially in the lower price ranges, values are beginning to firm but with great variance around the country.”

The national median existing-home price³ for all housing types was $164,700 in January, unchanged from a year earlier. Distressed homes, which accounted for 38 percent of sales last month, continue to downwardly distort the median price because they typically are discounted in comparison with traditional homes in the same area.

A parallel NAR practitioner survey⁴ shows first-time buyers purchased 40 percent of homes in January, down from 43 percent in December. Investors accounted for 17 percent of transactions in January, up from 15 percent in December; the remaining sales were to repeat buyers. The survey also shows that buyer traffic increased 9.4 percent in January.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said buying a home in the current environment has become more challenging. “First-time buyers and others who need a mortgage are increasingly losing out to all-cash investors for the best bargains in many areas, particularly for foreclosed homes where cash is king,” she said.

“Inventory conditions vary by price range, and of course there are major differences depending on location. Realtors® are the best buyer resource for strategies on winning bids in increasingly competitive markets,” Golder said. “The bidding for more desirable homes will only accelerate between now and the April 30 contract deadline to qualify for a tax credit of up to $8,000.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.03 percent in January from 4.93 percent in December; the rate was 5.05 percent in January 2009.

Single-family home sales fell 6.9 percent to a seasonally adjusted annual rate of 4.43 million in January from a level of 4.76 million in December, but are 8.6 percent above the 4.08 million pace in January 2009. The median existing single-family home price was $163,600 in January, down 0.4 percent from a year ago.

Existing condominium and co-op sales dropped 8.1 percent to a seasonally adjusted annual rate of 620,000 in January from 675,000 in December, but are 38.1 percent above the 449,000-unit level a year ago. The median existing condo price⁵ was $172,400 in January, which is 1.4 percent higher than January 2009.

Regionally, existing-home sales in the Northeast fell 10.9 percent to an annual pace of 820,000 in January but are 22.4 percent above a year ago. The median price in the Northeast was $245,300, a gain of 8.8 percent from January 2009.

Existing-home sales in the Midwest declined 6.9 percent in January to a level of 1.08 million but are 8.0 percent higher than January 2009. The median price in the Midwest was $130,300, which is 1.0 percent below a year ago.

In the South, existing-home sales dropped 7.4 percent to an annual pace of 1.87 million in January but are 12.0 percent above a year ago. The median price in the South was $140,200, down 2.0 percent from January 2009.

Existing-home sales in the West declined 5.2 percent to an annual rate of 1.28 million in January but are 7.6 percent higher than January 2009. The median price in the West was $203,400, down 5.8 percent from a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Data through December 2009, released today by Standard & Poor’s for bits S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index fell in the fourth quarter of 2009 but has improved in its annual rate of return, as compared to what was reported in the third quarter.

…

“As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now. However, the rate of improvement seen during the summer of 2009 has not been sustained,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “In the most recent months we are seeing fewer and fewer MSAs reporting monthly gains in prices. Only four cities saw month to month improvements in December over November, when you look at the raw data. We are in a seasonally slow period for home prices, however, so it is not surprising to see better statistics in the seasonally-adjusted data, where 14 of the markets and the two monthly composites all rose in December. Similarly, the National Composite fell by 1.1% in the fourth quarter, but rose by 1.6% on a seasonally-adjusted basis.”

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The inventory remains fairly stable, sales remain fairly strong with around 2,000 closing per month since June of last year. So why are the prices coming down? I believe at least a part of the problem lies in the condition of the distressed properties that are for sale now compared to a year ago. When the foreclosures first started hitting the market here, many of them were investor purchased homes in excellent condition. In fact, many of them were brand new homes that had barely been lived in. More and more, I am showing homes in disrepair and otherwise poor condition. Some are newer homes, but the process to foreclose and market has taken very long and time and toll on the homes. Others are foreclosures and short sales created by economic conditions. The owners just began to neglect the home, because they could not afford to maintain it. Of course, some take out their frustration on the home by damaging and ransacking the property before the bank takes it back.

Orlando Real Estate, David Welch Real Estate Optimist, As Seen On HGTV’s House Hunters

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An estimated 27,858 new and resale houses and condos were sold statewide last month. That was down 33.4 percent from 41,837 in December, and down 5.4 percent from 29,458 for January 2009. A decrease in sales from December to January is normal for the season. California sales for the month of January have varied from a low of 19,145 in 2008 to a peak of 47,137 in 2004, while the average is 32,048. MDA DataQuick’s statistics go back to 1988.

The median price paid for a home last month was $247,000, down 6.4 percent from $264,000 in December, and up 10.3 percent from $224,000 for January a year ago. Because of shifts in market mix, the statewide median always drops from December to January. The January median’s year-over-year increase was the third in a row, following 27 months of year-over-year declines. The median peaked at $484,000 in early 2007 and hit a low of $221,000 last April.

Of the existing homes sold last month, 44.0 percent were properties that had been foreclosed on during the past year. That was up from 40.8 percent in December and down from 58.2 percent in January a year ago. Foreclosure resales peaked at 58.8 percent last February.

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DataQuick News reports Bay Area home sales fall; median price up from last year, down from December

The number of Bay Area homes sold in January fell more than usual from December and dropped below the year-ago level for the first time in 17 months. The median sale price rose above last year for the fourth straight month but dipped 8 percent from December as demand shifted more toward foreclosures and less-expensive inland homes, a real estate information service reported.A total of 4,853 new and resale houses and condos closed escrow in the nine-county Bay Area last month. That was down 38.0 percent from 7,828 sales in December and down 3.9 percent from 5,050 sales in January 2009, according to MDA DataQuick of San Diego.

A decline in sales between December and January is normal for the season. On average, sales have dropped 28 percent between those two months since 1988, when DataQuick’s statistics begin.

Last month was the first since August 2008 in which sales fell on a year-over-year basis. January’s 4,853 sales total was 22.5 percent short of the average January tally – 6,261 – since 1988. Sales last month were also the second-lowest for a January since 1995, behind 3,586 sales in January 2007. The peak sales total for a January was in 2005, when 8,298 homes sold.

“The January figures show the market lost some of the momentum it had built up in the second half of ’09, when home buyers rushed to ensure they could take advantage of a tax credit, ultra-low mortgage rates and lower prices,” said John Walsh, MDA DataQuick president.

“It’s difficult to gauge how much of the slowdown stems from a thinner inventory of homes for sale in some areas as opposed to lower demand,” he said. “Whether last month’s relatively weak performance portends any substantial, lasting changes in the market is unclear. One month doesn’t make a trend and, in the past, January hasn’t proven to be very predictive.”

The January sales figures are based largely on deals that were struck during the holidays (late November through early January) and that closed escrow in January. In the Bay Area and across California, the sales data indicate that investors and first-time buyers remained the most committed home shoppers, and that helped skew the sales toward foreclosures and other lower-cost properties.

The median price paid for all new and resale houses and condos in the nine-county Bay Area last month was $350,000. That was down 7.9 percent from $380,000 in December but up 16.7 percent from $300,000 in January 2009.

Last month’s median was 20.7 percent higher than the lowest point reached in the housing downturn – $290,000 last March – but it was still 47.4 percent lower than the $665,000 peak median reached in June and July of 2007.

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From the Treasury Press Release:

More than 116,000 homeowners now have permanent modifications, nearly doubling the number from December, which also marked record progress. An additional 76,000 permanent modifications have been offered, and are waiting only for the borrower’s signature. In total, over 1 million homeowners have started trial modifications and nearly 1.3 million offers for trial modifications have been extended to homeowners.

Here are some of the charts and graphs:

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January shows decreased activity, median price remains higher than year ago

The 1,159 home sales in January are a 29.7% decrease from the 1,648 sales of December. The trend continued year-to-year, showing a 24.8% decrease from the 1,542 sales of January 2009. The winter months affected the distribution of types of sales, with bank-owned properties making up 44.4% of the 1,159 sales. This is up 3.7% from the previous month. Short sales decreased by .9% (to 23.6% of sales) and conventional sales dropped by 3.4% (32% of sales). Many homeowners take their properties off the market during slow winter months while bank-owned and short sale properties remain to maximize activity.

The current median sales price of $170,000 is .6% higher than the $169,000 median price of January 2009. Month-to-month, the median price dropped 9.3% from $187,500, likely reflective of the many REO and short sale properties remaining on the market. According to the January MLS summary, nearly 31% of all homes sold were between $120,000 – $179,999, while 26.8% sold for $200,000 – $249,999.

“Inventory for buyers is lower than the numbers indicate, because homes listed as active short sale contingent aren’t really available,” Barbara Harsch, SAR President, commented. Active Short Sale Contingent properties are short sale properties on which initial offers have been made. SAR is now breaking out “Active Short Sale Contingent” in the listing inventory. When split from the total number, these properties number 2,224, making up 41.3% of all “active” listings. The total listing inventory decreased slightly (.8%) month-to-month from 5,425 to 5,379. This is a 9.4% decrease from the 5,935 listing inventory of January 2009.

The Housing Market Supply figure increased 39.4% month from 3.3 to 4.6 Months. This figure is 21.8% below the Housing Market Supply figure of January 2009. This figure represents the amount of time – in months – it would take to deplete the total listing inventory given the current rate of sales. According to MetroList® MLS data, the average home spent 54 days on market (from the time it was listed to the time escrow was opened) and was 1,657 square feet. Of the 1,159 sales this month, 125 (10.7%) had 2 bedrooms or fewer, 601 (51.8%) had 3 bedrooms, 335 (28.9%) were 4 bedroom properties and 98 properties (8.4%) had 5+ bedrooms.

Doug’s Take: Well, i’ve been saying it for months and waiting for it to happen.  Now that we have bottomed out (remember we bottomed out in February 2009), we are going to have a bumpy ride along the bottom here.  Also, i’ve been mentioning that the winter months typically slow things down.  So i don’t think it’s too much of a surprise that our median price dipped a bit as well as the sales amount declined.  What is probably the best news for most buyers in the market right now is that the inventory has gone up a bit.  However, that’s mostly because the rate of sales declined.  At any rate, i would expect more of the same bouncing around of the median price for the next few months.  Remember the end of the tax credit is approaching.  Have to get an accepted offer by the end of April and close escrow by the end of June.  Up to $8,000 for first time buyers, and up to $6,500 for “move up buyers” who have lived in their current residence for 5 consecutive years out of the last 8.  Multiple offers on well priced homes within a few days is still common.  Let me know if you have any questions.  I’m here to help and now is the time to get your house on the market if you are thinking about selling soon.

clear skies,

doug

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The U.S. Census Bureau reports:

HOUSING STARTS

Privately-owned housing starts in January were at a seasonally adjusted annual rate of 591,000. This is 2.8 percent (±11.5%)* above the revised December estimate of 575,000 and is 21.1 percent (±12.3%) above the January 2009 rate of 488,000.

Single-family housing starts in January were at a rate of 484,000; this is 1.5 percent (±11.3%)* above the revised December figure of 477,000. The January rate for units in buildings with five units or more was 100,000.

(note that large plus/minus)

The Mortgage Bankers Association released their Weekly Survey:

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 12, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 2.1 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 0.5 percent compared with the previous week.The Refinance Index decreased 1.2 percent from the previous week and the seasonally adjusted Purchase Index decreased 4.0 percent from one week earlier.  The unadjusted Purchase Index increased 1.0 percent compared with the previous week and was 18.4 percent lower than the same week one year ago.

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DataQuick reports Southland home sales, median price edge above year-ago level

La Jolla, CA—Southern California home sales eked out a modest gain in January compared with a year earlier but fell sharply – as they normally do – from December. The median price paid rose above the year-ago level for the second consecutive month, but fell 6 percent from December as foreclosures and lower-cost inland markets claimed a higher share of sales, a real estate information service reported.

A total of 15,361 new and resale homes closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 31.2 percent from December’s 22,328, but up 0.9 percent from 15,227 in January 2009, according to MDA DataQuick of San Diego.

A decline in sales between December and January is normal for the season. On average, sales have fallen 28.4 percent between those two months since 1988, when DataQuick’s statistics begin.

January’s 15,361 sales mark the highest total for that month since 18,128 sales in January 2007. However, last month’s tally was 14.4 percent below the average number of sales for a January – 17,938 – since 1988.

Last month the sales pattern shifted a bit, with a greater portion of transactions involving distressed properties and lower-cost inland homes. Meanwhile, sales in many pricier areas lost some of the steam they had built in recent months, though high-end sales still outpaced the year-ago level.

Foreclosure resales – houses and condos sold in January that had been foreclosed on in the prior 12 months – made up 42.1 percent of all Southland resales, up from 39.6 percent in December but down from 56.4 percent in January 2009. Foreclosure resales hit a high of 56.7 percent last February, then tapered or leveled off month-to-month until they rose slightly in December, then again last month.

The rise in foreclosure resales helped push sales of homes priced below $300,000 up to 55 percent of all transactions last month, compared with 51.3 percent in December and 60 percent a year earlier. In the mid- to high-end, $500,000-plus home sales fell to 18.5 percent of all transactions, down from 20.6 percent in December but up from 13.6 percent in January 2009.

Over the last decade, $500,000-plus sales made up an average of 26 percent of monthly sales. Just before the credit crunch hit in August 2007, making larger “jumbo” mortgages more expensive and harder to obtain, $500,000-plus sales represented just over half of Southland transactions.

“The January stats underscore just how atypical this market remains. A huge chunk of what’s selling is still distressed. Investors and first-time buyers continue to dominate many areas, while the move-up market has yet to kick in. For many, the financing to buy high-end homes remains difficult, if not impossible, to obtain,” said John Walsh, MDA DataQuick president.

“High-end sales aren’t nearly as sluggish as a year ago, but they lost traction over the holidays, which can be seen in the January closing data,” he said. “Whether significant new patterns are emerging in the market is unclear. We try not to over-analyze one month’s data, and historically January and February haven’t been the best indicators for the year ahead.”

The median paid for all Southland houses and condos sold in January was $271,500, down 6.1 percent from $289,000 in December but up 8.6 percent from $250,000 a year earlier. It was the median’s second consecutive year-over-year increase. In December 2009 the median rose 4 percent from a year earlier, marking the first time the median had increased year-over-year since August 2007, when it rose 2.7 percent to $500,000, near its all-time peak. In late 2008 and early 2009, the year-over-year declines in the median ranged from 30 to 40 percent.

On a month-to-month basis, the median had increased or held steady for eight consecutive months before dropping 6 percent in January compared with December. January’s median was 46.2 percent lower than the peak Southland median of $505,000 reached during several months in early and mid 2007.

Part of the January median’s drop from December can be explained by the shift toward a higher portion of Southland sales occurring inland: The percentage of sales that were in the Inland Empire (Riverside and San Bernardino counties) rose to 35.2 percent, up from 32.3 percent in December and the highest since it was 36.3 percent in May 2009.

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In Alpine Meadows, CA we are seeing a welcomed change in the condo/townhouse market as buyers are taking advantage of distressed sales and well priced listings.  In the last 2 weeks we have seen 3 units out of 14 go into escrow and there are a few units that are in contract negotiations that will likely enter escrow within the next week!  This is a significant jump for the market considering there were only 2 closed condo/townhouse sales in Alpine Meadows in the last 12 months.

One of the units that is now in escrow is a property that I wrote an offer on for one of my buyers, unfortunately we did not get the unit.  After we submitted our reasonable market supported offer 2 other offers came in within 24 hrs and all of the sudden we were dealing with a multiple counter offer situation, a bidding war!  My clients had a set limit with what they were willing to spend and unfortunately another buyer came in with a higher all cash offer and took the prize.  So after 3 years of a weak condo/townhouse market in Alpine Meadows we are now dealing with multiple offers and bidding wars.

With the most recent sales, pending sales, and the current activity level on active listings it appears that we may have hit the bottom of the Alpine Meadows condo/townhouse market.  Only time will tell but when there are only 2 sales in a 12 month period and then all of a sudden 3 listings go into escrow and another 2 are in contract negotiations it appears that the market is responding positively to price.  If in 2010 there are no other sales besides the ones that are currently in escrow and the units that are in negotiations, then sales for 2010 vs 2009 will be up 60% year over year, and that’s if there are no other sales in the next 10 months!  To me it seems that we may be standing at the bottom with the market ready to move onward and upward.

If you are thinking of selling your Alpine Meadows condo/townhouse this might be a great opportunity to sell your property.  I would love to discuss your options and go over my marketing plan for your unit in order to sell your property quickly and for top dollar.  Lets talk today and discuss how I can help you achieve your real estate goals.

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…More significantly, a number of large markets saw an end to their streak of consecutive monthly gains, including Atlanta, Baltimore, Boston, Denver, Minneapolis, and Portland, Ore. In total, one in five (29) of the 143 markets tracked by Zillow saw monthly depreciation or flattening of home values in December after having experienced at least five consecutive month-over-month increases in home values during 2009. If these declines are sustained, as we expect to happen in many markets, the result will be a “double dip ” in home values, defined as two periods of sustained declines in home values separated by a brief period of stabilization or recovery.

Home values in an additional 29 markets, including the Los Angeles and New York metropolitan statistical areas (MSAs), increased on a month-over-month basis each month throughout the fourth quarter. However, the rate of increase slowed from November to December in 21 of those markets, and several appear likely to experience several months of sustained decline in early 2010.

While we’ve had a brief respite in mid-2009 from home value declines in many markets, the larger market correction has still not fully run its course. The recent stabilization owed a lot to policy support in the form of tax credits, lower mortgage rates and increased Federal Housing Administration lending. The remaining correction in home values we’ll see in the first half of this year is a function of market fundamentals, such as the increasing flow of foreclosures, high levels of inventory in the market and a probable decrease in demand as the impact of the tax credit wanes and mortgage rates rise.

While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year. Thereafter, home values are likely to bounce along the bottom with real appreciation remaining negligible for some time. This sustained period of languid real estate performance will really constitute the final leg of the housing downturn, as our possibilities are either sharper depreciation now followed by a sharper rebound off the bottom, or modest depreciation now followed by a long period of minimal appreciation. Either path results in home values getting to the same level ultimately in real, inflation-adjusted terms. The second path appears more likely at this point.

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The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.94 percent from 5.01 percent, with points increasing to 1.06 from 1.04 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

From Calculated Risk: BLS: Few Job Openings in December

The low turnover rate is another indicator of a very weak labor market.

From The New York Times: U.S. Trade Deficit Widened in December

The gap between the value of imports and exports was $40.2 billion in December, up 10.4 percent from November. Wall Street analysts had expected the deficit to grow to $35.8 billion.

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I usually break down the Phoenix housing market on a micro level. But, and as Monty Python used to say, “and now for something entirely different,” here’s a look at the larger macro picture.

I was interested to see just how far prices have dropped since the boom years. So I logged into the multiple listing service, came up with a few criteria, pushed a few buttons, and here you go: a 10-year look at the average price and price per square foot in the Phoenix housing market. This is my disclaimer: this information came directly from the Arizona Regional MLS. Any realtor and can get the same information. I’m not responsible for any errors in the data. OK, now that that’s over with, let’s get back to this post.

Read that chart in this manner: in 2009 there were 92,146 residential sales in the Phoenix area. That total sales volume equaled $15,668,606,573, or an average price of $170,045. Since the average sold home was 1,930 square feet, the average price per square foot in the Phoenix housing market for 2009 was $88.00

Housing Tracker

Phoenix residents and those in the know realize the rest of the chart isn’t really any ground breaking news because this information was available on an intuitive basis. In other words, we all knew that house values started an amazing increase in 2004 – 2005 and that many people bathed in the “afterglow” during 2006. But seeing these numbers all in one place — and in black and white — is a littleshock to the system. However, then the foreclosure crisis set in and home values decreased to their current state.

You can see a $94.00 drop in the price per square foot from 2006 to 2009. Obviously, that is due to the fact that approximately 55% of all homes sold in 2008 – 2009 were foreclosure-type properties. I’m talking about bank owned homes and short sales. That quantity of foreclosure sales is enough to suck the life out of values in any housing market (and we won’t name other housing markets in this post — you know which ones I’m talking about ).

When people ask me “is this the time to buy real estate” I can now honestly say prices are lower than they have been in the last 10 years.

Phoenix real estate

Housing Tracker Phoenix

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All of the 95826:

19  Sold Single Family Homes.

Average Square footage: 1,492

Average Listing Price: $ 187,484

Average Sales Price: $ 185,184

Average Days on Market:  28 days

Rosemont:

14  Sold SFR’s

Average Sq. feet: 1,504

Average List: $ 176,293

Median SOLD: $  177,786

Avg. DOM: 14 days

College Greens/Glenbrook:

5  Sold SFR’s

Average Sq. feet: 1,460

Average List: $ 218,820

Average SOLD: $ 205,900

Avg. DOM: 80 days

As of Today (February 5, 2010) here’s a snapshot of both markets:

Rosemont:  23  Active listings,  43 Active Short Sale/Contingent,  31  Pending.

College Greens/Glenbrook:  18  Active listings,  11  Active Short Sale/Contingent,  13  Pending.

Doug’s Take:  There are some great listings on the market in both neighborhoods right now. Let me know if you would like more info on any of them. As typical, Rosemont had more sales and a lower average sales price.  The average days on the Market continues to drop for the 95826.  This is due to lack of inventory (only 3 months for Sacramento County, considered a sellers market).  As long as the inventory continues to stay low we will see homes selling for over list price within a few days of hitting the market.

clear skies,

doug

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The BLS reports:

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs.

Here is a chart that shows both U3 and U6 data:

So, why did unemployment go down if we lost 20,000 jobs?

Calculated Risk explains:

A common question is: how could there be fewer payroll jobs, but the unemployment rate declined? This is because the data comes from two separate surveys. The unemployment Rate comes from the Current Population Survey (CPS: commonly called the household survey), a monthly survey of about 60,000 households.

The jobs number comes from Current Employment Statistics (CES: payroll survey), a sample of approximately 400,000 business establishments nationwide.

The establishment survey showed a loss of 20,000 payroll jobs in January, but the household survey showed an increase in the employment level of 541,000. The number to use for jobs is the establishment survey, but the unemployment number is based on the household survey and the surveys can diverge over the short period, but over time this will work out.

Mish adds:

In the continuing theater of BLS absurdities, the unemployment rate fell to 9.7% in spite of a 25th consecutive month of job losses. Some stopped counting at 22 months in November. However, I find November questionable.

This month professional services contributed 44,00 jobs to the plus side, but 52,000 of them were part-time jobs. Amazingly a table below shows the number of part-time workers decreased by 849,000 from last month. Go figure.

Moreover, the so-called 64,000 rise in November can be attributed to the seasonally adjusted hiring of 94,000 temporary workers. Here is a look at revisions ….

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